Billy E. Loftin, Jr. & Phyllis Loftin v. Haylie Royer

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

24-249

BILLY E. LOFTIN & PHYLLIS LOFTIN
VERSUS

HAYLIE ROYER

2 2s ofc oi i 2k oe oi oie oe

APPEAL FROM THE
FOURTEENTH JUDICIAL DISTRICT COURT
PARISH OF CALCASIEU, NO. 2024-0239
HONORABLE G. MICHAEL CANADAY, DISTRICT JUDGE

2 eo is 2k ok ok ae ok ok

VAN H. KYZAR
JUDGE

sek ORR

Court composed of Shannon J. Gremillion, Van H. Kyzar, and Charles G. Fitzgerald,
Judges.

AFFIRMED.

J. Ogden Middleton, II

J. Ogden Middleton, IT, P.L.C.

1744 White Street

Alexandria, LA 71301

(318) 443-4377

COUNSEL FOR DEFENDANT/APPELLANT:
Haylie Royer

Van C. Seneca

Loftin Law Group, LLC

113 Dr. Michael DeBakey Drive

Lake Charles, LA 70601

(337) 310-4300

COUNSEL FOR PLAINTIFFS/APPELLEES:
Billy E. Loftin, Jr. & Phyllis Loftin

KYZAR, Judge.

The defendant, Haylie Royer, appeals a default judgment in favor of the
plaintiffs, Billy E. Loftin, Jr. and Phyllis Loftin, for breach of a loan agreement in
the sum of $61,105.76, together with interest and costs. For the reasons herein, we
affirm the judgment.

FACTS AND PROCEDURAL HISTORY

Billy E. Loftin, Jr. and Phyllis Loftin (Plaintiffs) filed this action against their
daughter, Haylie Royer (Defendant), seeking to recover monies loaned to her for
tuition and living expenses during her attendance at a culinary school in Houston,
Texas. According to Plaintiffs’ petition, Defendant, after dropping out of McNeese
State University, convinced her parents to take out a “parent loan” from the Art
Institute of Houston (the Art Institute) in their names and then to loan that money to
her for her tuition and expenses while attending that school. Plaintiffs borrowed
$72,708.27 from the Art Institute at an annual interest rate of 8.25%, with the loan
amount disbursed on June 13, 2011.

According to Plaintiffs’ verbal agreement with Defendant, the loan funds were
directly deposited into her account at the Art Institute, and Defendant agreed to repay
the loan according to the same terms Plaintiffs agreed to in their loan agreement with
the Art Institute. Defendant then used the $72,708.27 for her tuition, fees, and other
expenses, but after spending the loan proceeds, she ceased attending school without

completing the program or earning a degree. When the loan initially became due,

Defendant made payments and continued to do so directly to the loan servicer until
March 17, 2022, when she ceased making monthly payments.

Plaintiffs instituted this suit on January 19, 2024, asserting that Defendant’s
refusal to pay amounted to a breach of her verbal contractual obligation to reimburse
them for the loan she caused them to incur on her benefit. They sought recovery in
the amount of $61,105.76, together with 8.25% interest from the date of judicial
demand and court costs. Defendant was served with the petition and a requests for
admissions on February 2, 2024, but failed to file responsive pleadings and/or an
answer within thirty days of service. A default judgment was rendered on March 6,
2024, in the amount demanded in the suit.”

Defendant thereafter filed a motion to appeal, which was granted. Here,
Defendant asserts that the trial court abused its discretion, manifestly erred, and
committed reversible factual and legal error as follows:

l. The trial judge erred in granting the plaintiffs/appellees a default
judgment of $61,105.76.

2. The trial judge manifestly erred in failing to examine the Self-
Proving Affidavit for Default Judgment and the Motion for
Default Judgment and Attorneys Certificate . . . executed and
filed by the appellees-plaintiffs [sic] and enforcing its admissions
as to how much this appellant paid on the student loan and how
much if anything appellant stil! owes her parents.

' Plaintiffs were granted payment deferrals during the Covid outbreak on their loan from
the Art Institute and permitted Defendant to defer payments on her verbal agreement as well to
coincide with the original loan.

* Plaintiffs initially went into open court to confirm the default judgment on February 27,
2024, but after putting on evidence and testimony, the trial court noted that the thirty-day delay for
answering the petition and request for admissions, as set forth in La.Code Civ.P. art. 1001, had not
yet expired.

* The default judgment was rendered without a hearing in open court on Plaintiffs’
submission of a Motion for Default Judgment and Attorney’s Certificate, a Clerk’s Certificate that
no answer has been filed, and a Self-Authenticating Affidavit for Default Judgment executed by
Plaintiffs describing the facts set forth in the petition.

3. The trial judge erred and abused his discretion to the extent he
allowed the appellants to come forward without any evidence as
to the payments that were made to and collected by either of the
two loan service [sic] companies involved in the case.

OPINION

In her three assignments of error, Defendant asserts that the trial court erred
in granting the default judgment, that it committed manifest error in failing to fully
examine Plaintiffs’ affidavit before determining the amount owed by Defendant, and
that it erred and abused its discretion in awarding Plaintiffs $61,105.76 when they
offered no evidence as to the amount she had repaid on the loan.

We deem all of Defendant’s assignments of error to be a challenge to the
sufficiency of the evidence relied upon by the trial court in granting the judgment
and in awarding the amount owed. Thus, we address the assigned errors collectively.

Appellate review of a default judgment is restricted to
determining the sufficiency of the evidence offered in support of the
judgment. Arias v. Stolthaven New Orleans, L.L.C., 08-1111
(La.5/5/09), 9 So.3d 815. Generally, to obtain a reversal of a default
judgment, a defendant must overcome the presumption that the
judgment has been rendered on sufficient evidence and is correct.
Spencer v. James, 42,168 (La.App.2d Cir.5/9/07)[,] 955 So.2d 1287.
This presumption does not attach, however, where the testimony is
transcribed and contained in the record. /d.

Youngblood v. S. Air, Inc., 46,183, p. 5 (La.App. 2 Cir. 3/2/11), 58 So.3d 1020, 1024.

Additionally, in Sessions & Fishman v. Liquid Air Corp., 616 So.2d 1254,
1258 (La.1993), the supreme court discussed the requirements of proof sufficient to
support a default judgment and the presumption that may be applied by a reviewing

court on appeal:

In order for a plaintiff to obtain a default judgment, “he must
establish the elements of a prima facie case with competent evidence,
as fully as though each of the allegations in the petition were denied by
the defendant.” Thibodeaux v. Burton, 538 So.2d 1001, 1004
(La.1989); Blue Bonnet Creamery, Inc. v Simon, 243 La. 683, 146
So.2d 162, 166 (1962). “In other words, the plaintiff must present

competent evidence that convinces the court that it is probable that he
would prevail on a trial on the merits.” Thibodeaux, 538 So.2d at 1004.
A plaintiff seeking to confirm a default must prove both the existence
and the validity of his claim. “There is a presumption that a default
judgment is supported by sufficient evidence, but this presumption does
not attach when the record upon which the judgment is rendered
indicates otherwise.” Ascension Builders, Inc. v. Jumonville, 262 La.

519, 263 So.2d 875, 878 (1972); see also Massey v. Consumer’s Ice Co.

of Shreveport, 223 La. 731, 66 So.2d 789, 790 (1953).

It is noted that as to the confirmation of the default judgment on March 6,
2024, there was no hearing or testimony taken or transcribed. While there had been
an earlier attempt to confirm the default where testimony was indeed taken and
transcribed, the trial court took notice that the time delays for answering the suit had
not lapsed, and no further action was taken. The transcript of the earlier testimony
was not offered as evidence when the default judgment was confirmed. Thus, the
presumption that the judgment was rendered on sufficient evidence does apply here,
unless that evidence presented does not provide prima facie support for Plaintiffs’
claim.

The issue presented in this case is whether the evidence introduced by
Plaintiffs to confirm the default judgment for the breach of a conventional
obligation to repay a loan was sufficient to establish a prima facie case, as per
the provisions of La.Code Civ.P. art. 1702(A)(1), that provides, in part, the
following:

If a defendant in the principal or incidental demand fails to
answer or file other pleadings within the time prescribed by law or by

the court, and the plaintiff establishes a prima facie case by competent

and admissible evidence that is admitted on the record, a default

judgment in favor of the plaintiff may be rendered, provided that notice

that the plaintiff intends to obtain a default judgment is sent if required

by this Paragraph, unless such notice is waived.

Here, the original petition was filed along with a request for admissions of

fact. Louisiana Code of Civil Procedure Article 1001 provides that “[i]f the plaintiff

files and serves a discovery request with his petition, the defendant shall file his
answer to the petition within thirty days after service of citation and service of
discovery request.” As of March 6, 2024, the day the default judgment was signed,
thirty days had lapsed from the date of service of the petition and the request for
admissions of fact. The Clerk’s Certificate submitted in support of the default
judgment verifies the date of service and the fact that no responsive pleadings were
filed. Thus, the only question before this court is whether the evidence presented to
and considered by the trial court was sufficient to prove a prima facie case for
Plaintiffs.

When a demand is based upon a conventional obligation,
affidavits and exhibits annexed thereto that contain facts sufficient to
establish a prima facie case shall be admissible, self-authenticating, and
sufficient proof of such demand. The court may, under the
circumstances of the case, require additional evidence in the form of
oral testimony before entering a default judgment.

La.Code Civ.P. art. 1702(B)(1).
Additionally, when the demand is for a sum due as the result of a conventional
obligation, La.Code Civ.P. art. 1702(C) provides, in part:

The plaintiff shall submit to the court the proof required by law and the
original and not less than one copy of the proposed default judgment.
The judge shall, within seventy-two hours of receipt of such submission
from the clerk of court, sign the proposed default judgment or direct
that a hearing be held. The clerk of court shall certify that no answer or
other pleading has been filed by the defendant. The minute clerk shall
make an entry showing the dates of receipt of proof, review of the
record, and rendition of the default judgment. A certified copy of the
signed default judgment shall be sent to the plaintiff by the clerk of
court, and notice of the signing of the default judgment shall be given
as provided in Article 1913.

“A party who demands performance of an obligation must prove the existence
of the obligation.” La.Civ.Code art. 1831. ““When a writing is not required by law, a

contract not reduced to writing, for a price or, in the absence of a price, for a value

not in excess of five hundred dollars may be proved by competent evidence[]” but
“li]f the price or value is in excess of five hundred dollars, the contract must be
proved by at least one witness and other corroborating circumstances.” La.Civ.Code
art. 1846.

The evidence presented for consideration of the default judgment consisted of
Plaintiffs’ submission of a Motion for Default Judgment and Attorney’s Certificate,
a Clerk’s Certificate that no answer has been filed, and a Self-Authenticating
Affidavit for Default Judgment executed by Plaintiffs. The Motion for Default
Judgement and the Self-Authenticating Affidavit both refer to the original petition
filed in the record together with the attached exhibits consisting of two letters sent
by Mr. Loftin to Defendant regarding repayment of the loan amount and a November
30, 2022 Nelnet document containing information pertaining to the loan, including
a current balance of $61,105.78.

We find this to be sufficient proof of the existence of a conventional loan
obligation between Defendant and Plaintiffs. The admissible and self-authenticating
attachments, including Plaintiffs’ witness affidavit testimony, established that they
secured a loan from the Art Institute for a set amount at a set interest rate, and
Defendant agreed to repay Plaintiffs the amount of that loan at the same terms. The
proceeds of that loan went directly to Defendant and were spent by her. The evidence
shows that Defendant, in fact, acknowledged the obligation and, at the least, tacitly
agreed to it by making payments towards the loan for extended periods until she
defaulted and refused to make any further payments following the end of the deferral
period in October 2023.

The instant case is similar to the facts reviewed by this court in Daniels v.

Chandler, 525 So.2d 98 (La.App. 3 Cir. 1988). There, the trial court had concluded

6

that a transaction between the plaintiffs and the defendant was a loan and rendered
judgment in favor of the plaintiffs for $6,199.50, which included the principal
amount of $4,400.00, plus interest in the amount of $1,799.50. However, the interest
awarded in the judgment was interest accruing on the bank loan obtained by the
plaintiffs rather than legal interest. The plaintiffs established to the satisfaction of
the trial court that the bank loan was the source of the money loaned to the defendant
and that he had agreed to be responsible for the interest which would accrue on that
loan. This court affirmed the judgment of the trial court, finding that the plaintiffs
proved the verbal loan agreement and that the defendant agreed to pay the interest
as called for in the plaintiffs’ bank loan, the source of the money loaned to the
defendant.’ We, likewise, conclude that Plaintiffs proved the existence of the verbal
loan agreement with Defendant and the terms of the loan. The competent default
judgment evidence also established a prima facie case that Defendant defaulted on
the loan agreement. Thus, the only question remaining is the amount of the unpaid
loan.

Defendant claims that the evidence before the trial court was insufficient to
support the amount awarded and argues that she was not properly credited for the
amounts she had paid towards the loan. We disagree.

Plaintiffs’ submissions established a prima facie case that the verbal loan was
agreed to by Defendant, that the original loan amount was $72,708.27, the
disbursement date was June 13, 2011, the outstanding principal balance was

$61,105.76 as of November 30, 2023, and that the loan bears interest at the rate of

The court did reduce the amount of interest awarded based on the facts presented at trial.

8.25% per annum. Defendant agreed to make monthly payments of $602.01 on the
loan but refused to make any further payments after October 21, 2023. Plaintiffs’
submissions establish that the balance due on the original Art Institute loan, and thus,
the verbal loan as of November 30, 2023, is the amount demanded in the petition,
which is the $61,105.76 awarded by the judgment.

While Defendant argues that she was not properly credited for payments she
made on the loan, this assertion is refuted by the documentary and testimonial
evidence submitted in the affidavit in support of the default judgment. Within that
evidence, Plaintiffs acknowledge that Defendant did make many payments towards
the loan agreement for which she was credited. However, the record also contains
competent evidence that the unpaid balance on the original loan, thus on the verbal
loan, was the same as demanded and awarded. Defendant’s argument also ignores
the fact that during the lifetime of the loan, except for the periods of forbearance
during the Covid outbreak, interest was accruing on the borrowed amount, which
Defendant, in her verbal agreement with Plaintiffs, agreed to pay. Defendant’s
assertion that she paid over $70,000.00 towards the loan and, thus, must have paid
it in full or nearly in full fails to account for any accrued interest or “overcome the
presumption that the judgment has been rendered on sufficient evidence and is
correct.” Youngblood, 58 So.3d at 1024. The record on which the default judgment
was rendered refutes Defendant’s argument and supports the presumption of its
correctness. Accordingly, we affirm the judgment of the trial court in all respects.

DECREE
The judgment of the trial court in favor of Billy E. Loftin, Jr. and Phyllis

Loftin, and against Haylie Royer, in the amount of $61,105.76, together with 8.25%

interest from the date of judicial demand and court costs, is affirmed. Costs of appeal
are assessed to Haylie Royer.

AFFIRMED.